The Vanguard Value Index Fund ETF Shares (VTV) and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and VIG is a Vanguard Large Blend fund. So, what’s the difference between VTV and VIG? And which fund is better?
The expense ratio of VTV is 0.02 percentage points lower than VIG’s (0.04% vs. 0.06%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than VIG over the past ten years.
In this article, we’ll compare VTV vs. VIG. We’ll look at risk metrics and portfolio growth, as well as at their holdings and performance. Moreover, I’ll also discuss VTV’s and VIG’s industry exposure, annual returns, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Value Index Fund ETF Shares||Vanguard Dividend Appreciation Index Fund ETF Shares|
|Category||Large Value||Large Blend|
The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.
VTV’s dividend yield is 0.59% higher than that of VIG (2.15% vs. 1.56%). Also, VTV yielded on average 1.27% less per year over the past decade (12.07% vs. 13.35%). The expense ratio of VTV is 0.02 percentage points lower than VIG’s (0.04% vs. 0.06%).
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The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.
VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.
VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.
VTV is 5.63% more exposed to the Financial Services sector than VIG (22.81% vs 17.18%). VTV’s exposure to Healthcare and Industrials stocks is 4.32% higher and 4.62% lower respectively (19.84% vs. 15.52% and 12.61% vs. 17.23%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 1.11% less of the fund’s holdings compared to VIG (12.17% vs. 13.28%).
|Berkshire Hathaway Inc Class B||2.98%|
|JPMorgan Chase & Co||2.82%|
|Johnson & Johnson||2.6%|
|UnitedHealth Group Inc||2.27%|
|Procter & Gamble Co||1.98%|
|Bank of America Corp||1.91%|
|Exxon Mobil Corp||1.6%|
|Comcast Corp Class A||1.57%|
|Verizon Communications Inc||1.32%|
VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.
Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.
|JPMorgan Chase & Co||3.8%|
|Johnson & Johnson||3.67%|
|Visa Inc Class A||3.22%|
|UnitedHealth Group Inc||3.22%|
|The Home Depot Inc||2.91%|
|Procter & Gamble Co||2.82%|
|Comcast Corp Class A||2.21%|
VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.
UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.
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The Vanguard Value Index Fund ETF Shares (VTV) has a Alpha of -1.92 with a Standard Deviation of 13.78 and a R-squared of 92.61. Its Beta is 0.98 while VTV’s Treynor Ratio is 11.94. Furthermore, the fund has a Sharpe Ratio of 0.87 and a Mean Return of 1.05.
The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Beta of 0.86 with a Sharpe Ratio of 1.01 and a Alpha of 0.12. Its Treynor Ratio is 14.33 while VIG’s Standard Deviation is 12.25. Furthermore, the fund has a Mean Return of 1.09 and a R-squared of 92.2.
VTV’s Mean Return is 0.04 points lower than that of VIG and its R-squared is 0.41 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than VIG. The Alpha and Beta of VTV are 2.04 points lower and 0.12 points higher than VIG’s Alpha and Beta.
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VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% respectively.
The year 2019 was the strongest year for VIG, returning 29.71% on an annual basis. The poorest year for VIG in the last ten years was 2018, with a yield of -2.02%. Most years the Vanguard Dividend Appreciation Index Fund ETF Shares has given investors modest returns, such as in 2012, 2016, and 2010, when gains were 11.61%, 11.84%, and 14.67% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.
With a $10,000 investment in VIG, the end total would have been $37,951. This equates to a $27,951 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.
VTV’s CAGR is 1.27 percentage points lower than that of VIG and as a result, would have yielded $4,788 less on a $10,000 investment. Thus, VTV performed worse than VIG by 1.27% annually.
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